GoGold Resources earns US$2.73-million in Q1
Construction of the Parral tailings project in Chihuahua, Mexico. Photo courtesy GoGold Resources Inc.
GoGold Resources Inc. [GGD-TSX; GLGDF-OTCQX] reported financial results for the quarter ending March 31, 2021, with revenue of $13.2-million (all amounts are in U.S. dollars) from the sale of 541,608 silver equivalent ounces which provided cash flow from operations of $3.3-million.
“Parral had another great quarter, generating $6.3-million in free cash flow and $13-million for the first six months of the fiscal year, which is being reinvested into Los Ricos, which we believe will generate great value for our shareholders,” Brad Langille, president and CEO, stated. “We have successfully renegotiated the Parral offtake agreement which we believe will increase quarterly cash flows by approximately $300,000 on a go-forward basis.”
Financial highlights for the quarter ending March 31, 2021 included free cash flow from Parral of $6.3-million. Company cash flow from operations before working capital was $4.9-million, $3.3-million after working capital. Net income was $2.7-million (one cent per share). Revenue was $13.2-million on the sale of 541,608 silver equivalent ounces at a realized price per ounce of $24.43. Cash was US$54.7-million prior to financing.
Production was 551,207 silver equivalent ounces, consisting of 302,933 silver ounces, 3,208 gold ounces and 86 copper tonnes.
On May 7, 2021, the company closed the previously announced bought deal financing for gross proceeds of $28.75-million to strengthen the balance sheet and continue to derisk the future development of the mine at Los Ricos South.
On April 29, 2021, the company amended and restated its offtake agreement where the company was previously selling all of the production from Parral. Due to the high volatility of gold and silver prices, the agreement has cost the company 3.6% of revenue over the life of the project thus far. The amended agreement will cost 1.7% of revenue going forward, for an estimated net savings of 1.9%.
GoGold Resources is a Canadian-based silver and gold producer focused on operating, developing, exploring and acquiring high-quality projects in Mexico. The company operates the Parral tailings mine in the state of Chihuahua and has the Los Ricos South and Los Ricos North exploration projects in the state of Jalisco.